Analysis of the Great Depression Indicates That

question 1

Multiple Choice

Analysis of the Great Depression indicates that

• A) even though monetary and fiscal policies were highly expansionary, they were unable to offset the economic plunge.
• B) even though monetary policy was expansionary, restrictive fiscal policy dominated during the 1930s.
• C) a reduction in tax rates could not prevent the economic downturn from spiraling into a depression.
• D) the severity of the economic decline, if not its onset, was the result of perverse monetary, fiscal and regulatory policies.

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Definitions:

Consumption Bundle

A combination of various goods and services that an individual consumes at a given time.

Slope

In mathematics, the rate at which a line rises or falls relative to a horizontal distance.

Indifference Curves

Graphs showing different bundles of goods between which a consumer is indifferent, reflecting the consumer's preferences and trade-offs.

Bundle

A combination of goods or services that are sold together as a single package.